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Business Segment Reporting | 9 Months Ended
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Feb. 24, 2019
Segment Reporting [Abstract] |
Business Segment Reporting | Business Segment Reporting Prior to May 2018, the Company managed its business operations through three strategic reportable business segments: Packaged Fresh Vegetables, Food Export, and Biomaterials. These segments were based upon the information reported to the Chief Executive Officer, who is the chief operating decision maker (“CODM”). However, in May 2018, the Company discontinued its Food Export business segment. As a result, the Company met the requirements of ASC 205-20 and ASC 360 to report the results of the Food Export business segment as discontinued operations. The operating results for the Food Export business segment, for the three and nine months ended February 25, 2018, have been reclassified to discontinued operations and are no longer reported as a separate segment. Beginning in fiscal year 2019, the Company realigned the management of its business and started using three strategic reportable business segments: the Curation Foods segment, the Lifecore segment, and the Other segment (previously known as Natural Foods, Biomaterials, and Other segments until the third quarter of fiscal 2019 when the Company completed the rebranding of its natural food business by announcing the new name Curation Foods. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for more information). Curation Foods business includes (i) five natural food brands, including the Company’s three existing brands, Eat Smart, O Olive Oil & Vinegar, and Now Planting, as well as two new brands, Yucatan, and Cabo Fresh acquired by the Company through the acquisition of Yucatan Foods during the third quarter of fiscal 2019 (see the Note 2 - Acquisitions for more details on this transaction), and (ii) BreatheWay® activities. Our Curation Foods segment includes activities to market and pack specialty packaged whole and fresh-cut fruit and vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club store and food services industry and are sold under the Eat Smart and GreenLine brands. The Curation Foods segment also includes sales of BreatheWay packaging to partners for fruit and vegetable products, sales of olive oils and wine vinegars under our O brand, sales of soups under our Now Planting brand, and sales of avocado products under the recently acquired brands Yucatan and Cabo Fresh. The Lifecore segment sells products utilizing hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellular matrix of connective tissues in both animals and humans, and non-HA products for medical use primarily in the Ophthalmic, Orthopedic and other markets. The Other segment includes corporate general and administrative expenses, non-Curation Foods and non-Lifecore interest income and income tax expenses. All of the Company's assets are located within the United States of America except for the production facility in Mexico, which was acquired by the Company as a result of the Yucatan Foods acquisition. See Note 2 - Acquisitions for more details on this transaction. The Company’s international sales by geography are based on the billing address of the customer and were as follows (in millions):
| Three Months Ended |  | Nine Months Ended
| February 24, 2019 |  | February 25, 2018 |  | February 24, 2019 |  | February 25, 2018
Canada | $ | 24.1 |  |  | $ | 20.3 |  |  | $ | 64.3 |  |  | $ | 55.9 |
Belgium | $ | 9.9 |  |  | $ | 11.5 |  |  | $ | 12.4 |  |  | $ | 14.3 |
Ireland | $ | 1.4 |  |  | $ | — |  |  | $ | 3.7 |  |  | $ | 3.2 |
Denmark | $ | 0.1 |  |  | $ | — |  |  | $ | 0.3 |  |  | $ | — |
Switzerland | $ | 0.2 |  |  | $ | — |  |  | $ | 0.8 |  |  | $ | — |
Mexico | $ | 0.4 |  |  | $ | 0.2 |  |  | $ | 0.5 |  |  | $ | 0.2 |
All Other Countries | $ | 0.1 |  |  | $ | 1.5 |  |  | $ | 1.3 |  |  | $ | 2.0 |
Operations by business segment consisted of the following (in thousands):
| Curation Foods(1) |  | Lifecore |  | Other |  | Total
Three Months Ended February 24, 2019 |  |  |  |  |  |  |
Net sales | $ | 131,984 |  |  | $ | 23,703 |  |  | $ | — |  |  | $ | 155,687 |
International sales | $ | 24,172 |  |  | $ | 12,029 |  |  | $ | — |  |  | $ | 36,201 |
Gross profit | $ | 9,641 |  |  | $ | 11,576 |  |  | $ | — |  |  | $ | 21,217 |
Net income (loss) from continuing operations | $ | (6,817 | ) |  | $ | 5,836 |  |  | $ | 2,048 |  |  | $ | 1,067 |
Depreciation and amortization | $ | 2,875 |  |  | $ | 1,028 |  |  | $ | 145 |  |  | $ | 4,048 |
Dividend income | $ | 413 |  |  | $ | — |  |  | $ | — |  |  | $ | 413 |
Interest income | $ | 26 |  |  | $ | — |  |  | $ | 8 |  |  | $ | 34 |
Interest expense, net (2) | $ | 1,164 |  |  | $ | — |  |  | $ | 607 |  |  | $ | 1,771 |
Income tax (benefit) expense | $ | (829 | ) |  | $ | 1,946 |  |  | $ | (875 | ) |  | $ | 242 |
Nine Months Ended February 24, 2019 |  |  |  |  |  |  |
Net sales | $ | 353,502 |  |  | $ | 51,765 |  |  | $ | — |  |  | $ | 405,267 |
International sales | $ | 64,732 |  |  | $ | 18,587 |  |  | $ | — |  |  | $ | 83,319 |
Gross profit | $ | 33,926 |  |  | $ | 20,221 |  |  | $ | — |  |  | $ | 54,147 |
Net income (loss) from continuing operations | $ | (5,466 | ) |  | $ | 6,586 |  |  | $ | (448 | ) |  | $ | 672 |
Depreciation and amortization | $ | 7,111 |  |  | $ | 2,982 |  |  | $ | 413 |  |  | $ | 10,506 |
Dividend income | $ | 1,238 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,238 |
Interest income | $ | 87 |  |  | $ | — |  |  | $ | 26 |  |  | $ | 113 |
Interest expense, net (2) | $ | 2,027 |  |  | $ | — |  |  | $ | 1,248 |  |  | $ | 3,275 |
Income tax (benefit) expense | $ | (217 | ) |  | $ | 2,196 |  |  | $ | (1,395 | ) |  | $ | 584 |
Three Months Ended February 25, 2018 |  |  |  |  |  |  |  |
Net sales | $ | 121,950 |  |  | $ | 22,959 |  |  | $ | — |  |  | $ | 144,909 |
International sales | $ | 20,336 |  |  | $ | 13,156 |  |  | $ | — |  |  | $ | 33,492 |
Gross profit | $ | 8,197 |  |  | $ | 11,609 |  |  | $ | — |  |  | $ | 19,806 |
Net income (loss) from continuing operations | $ | (2,801 | ) |  | $ | 6,175 |  |  | $ | 12,907 |  |  | $ | 16,281 |
Depreciation and amortization | $ | 2,120 |  |  | $ | 940 |  |  | $ | 82 |  |  | $ | 3,142 |
Dividend income | $ | 413 |  |  | $ | — |  |  | $ | — |  |  | $ | 413 |
Interest income | $ | 32 |  |  | $ | — |  |  | $ | 55 |  |  | $ | 87 |
Interest expense, net | $ | — |  |  | $ | — |  |  | $ | 531 |  |  | $ | 531 |
Income tax (benefit) expense | $ | (609 | ) |  | $ | 1,763 |  |  | $ | (13,981 | ) |  | $ | (12,827 | )
Nine Months Ended February 25, 2018 |  |  |  |  |  |  |  |
Net sales | $ | 333,915 |  |  | $ | 49,236 |  |  | $ | — |  |  | $ | 383,151 |
International sales | $ | 56,259 |  |  | $ | 19,330 |  |  | $ | — |  |  | $ | 75,589 |
Gross profit | $ | 33,181 |  |  | $ | 20,348 |  |  | $ | — |  |  | $ | 53,529 |
Net income from continuing operations | $ | 365 |  |  | $ | 7,280 |  |  | $ | 11,405 |  |  | $ | 19,050 |
Depreciation and amortization | $ | 6,050 |  |  | $ | 2,715 |  |  | $ | 311 |  |  | $ | 9,076 |
Dividend income | $ | 1,238 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,238 |
Interest income | $ | 60 |  |  | $ | — |  |  | $ | 100 |  |  | $ | 160 |
Interest expense, net | $ | — |  |  | $ | — |  |  | $ | 1,415 |  |  | $ | 1,415 |
Income tax (benefit) expense | $ | 393 |  |  | $ | 2,110 |  |  | $ | (13,855 | ) |  | $ | (11,352 | )
(1) | During the third quarter of fiscal 2019, the Company started consolidating Yucatan Foods whose results are included in the Company's operating results starting from December 1, 2018. See Note 2 - Acquisition for more details of this transaction.
(2) | Beginning in first quarter of fiscal 2019, the Company began allocating interest expense to its reportable segments in information provided to its CODM to enhance visibility into how financing activities impact the discrete financial results.
During the nine months ended February 24, 2019 and February 25, 2018, sales to the Company’s top five customers accounted for 46% and 49% of sales, respectively. The Company’s top two customers, Costco Wholesale Corporation and Wal-Mart Stores, Inc., from the Curation Foods segment, accounted for 17% and 16%, respectively, of revenues for the nine months ended February 24, 2019, and 19% and 18%, respectively, for the nine months ended February 25, 2018.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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